Monday, November 10, 2008

This might be relevant at York U right now

The curious economics of university faculty unions

via Worthwhile Canadian Initiative by Stephen Gordon on 11/9/08

I was on strike a couple of weeks ago, for the span of three days. Not just me, of course; the faculty at l'Université Laval is unionised.

The whole notion of faculty unions seems a bit odd to me, and it's not just the incongruous image of seeing tenured professors whose salaries put them in the top 5% of the income distribution walking picket lines. When it comes to the day-to-day functioning of the university, professors are the bosses: we decide what gets taught, we decide who teaches it, and we decide what research gets done. And the decision-making process behind those decisions is invariably consensual: more than anything else, the functioning of a typical department resembles that of an anarcho-syndicalist commune.

So any advantage professors might see in unionising must come from the perceived rents they can obtain from collective bargaining. But where would those rents come from? Arthur Hosios and Aloysius Siow address this question in their CJE article "Unions without rents: The curious economics of faculty unions". It turns out that these rents are extracted from high-quality scholars and redistributed to their lower-quality colleagues. Here's the abstract from the ungated version:

Since the faculty is the de facto residual claimant of the university, any earnings gain must come from an increase in university revenue. A model is developed to explain the fact that faculty unions have a negligible positive (and oftentimes negative) effect on average faculty wages. A union that aims to promote the interests of the median faculty member negotiates wage redistributions and more onerous working conditions (e.g., greater teaching loads), despite the negative impact these changes have on research output. Union formation may sometimes appear to raise average wages, but only because the benchmark non-unionized university fails to maximize average wages when scholars derive non-pecuniary benefits from research and teaching. Using Canadian data, we estimate that there is no gain in faculty earnings or university revenue after a public university unionizes. Nevertheless, there is evidence for earnings redistribution within a unionized faculty, from high- to low-paying academic disciplines and from assistant to full professors, and for a decrease in research output.

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